When Do the Interest Limitation Rules End?

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From 1 April 2025, property investors can once again claim 100% of the interest paid on loans for rental properties. In the lead-up to this date, from 1 April 2024 to 31 March 2025, 80% of interest incurred has been deductible. This applies regardless of when the property was purchased, or the loan was taken out. 

What were the Interest Limitation Rules? 

From 1 October 2021 to 31 March 2025, the interest limitation rules restricted the ability to deduct interest costs on residential investment properties unless an exclusion or exemption applied. The rules applied only to property in New Zealand. 

What Happens to Interest Payments Between October 2021 and March 2024? 

Interest deductions that were previously disallowed between 1 October 2021 and 31 March 2024 are not recoverable unless the property is sold and subject to tax. 

Can You Claim Interest Deductions on Your Rental Property? 

In most cases, yes — but from 1 April 2025 onward. In the meantime, 80% is still deductible for the current tax year. 

We recommend speaking with your accountant or the Inland Revenue Department (IRD) for specific guidance. Tax rules change regularly, and what applies to one investor may not apply to another. 

What Property Investors Should Do Now 

• Review your interest expenses for the 2024–25 year
• Get professional tax advice before 31 March 2025
• Reassess your long-term investment strategy now that deductibility will return

If you're working with a property manager, make sure they can provide clear reporting to help with end-of-year tax prep. 

Crockers works with thousands of residential investors across Auckland and beyond. If you'd like to simplify your property ownership, chat with one of our team at pm@crockers.co.nz or call for a chat on 09 623 5952 about how a Crockers Property Manager can support your portfolio. 

Frequently Asked Questions 

When can I claim full interest deductions again?
From 1 April 2025, you can claim 100% of interest paid on loans for residential investment properties. 

Can I claim interest I missed between 2021 and 2024?
No. Interest deductions disallowed during that period are not retrospectively claimable unless the property is sold and taxed under relevant rules. 

Do the rules apply to new builds?
New builds have had exemptions under the original rules. From 1 April 2025, full deductibility will apply across the board, unless the property is owner-occupied. 

Should I refinance my loan now?
Speak to your mortgage adviser or accountant before making any financial decisions. The changes could impact how you structure your debt. 

What’s the current deductible percentage for interest?
From 1 April 2024 to 31 March 2025, 80% of interest costs are deductible.